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AMP has reduced the cost of the capital guarantee it offers on a number of products available through its North platform and closed off the guarantee on existing funds to new clients.

At the same time, AMP has also added three new funds that will be the only funds available on North to new customers seeking a guarantee, while existing customers will retains access to previous guarantee options.

The cost of the most popular guarantee option in the North funds range, the Protected Growth 10-year term, will drop from 1.8 per cent to 1.5 per cent per annum. The guarantee option is charged on top of any investment and advice charges associated with investing in the funds.

The three new funds will invest in a blend of Australian and international equities, fixed income and cash and offer growth, balanced and moderately defensive investment options.

AMP introduced the North guarantee in 2007 to allow investors to benefit from high markets and to protect themselves against falling markets for an additional cost.

AMP said the North range was designed to provide a rate of investment growth in line with diversified funds that held comparable target asset allocations, but managed short-term market movements by increasing or decreasing exposure to shares based on estimated short-term market volatility.

AMP platforms director Steve Burgess said the changes would allow North investors to manage volatility within their portfolios and access the guarantee option and remain in protected growth assets to preserve money in retirement.